Experts are expecting a shakeup in the oil industry now that Donald Trump is headed back to the White House. Not only are they predicting the removal of regulations, but also sanctions on foreign producers.
One of Trump’s many campaign promises was to cut the price of energy in half within his first year in office. He vowed to do this, in part, by opening the country back up to oil producers, allowing them an easier path to drilling.
“My goal will be to cut your energy costs in half within 12 months after taking office,” former President Donald Trump said in a speech in Michigan in September. “We can do that.”
On Wednesday, while speaking at the Republican campaign headquarters in Florida, President-Elect Trump shared his thoughts on US oil production while joking that Robert F. Kennedy Jr., who is an environmental lawyer and expected Trump cabinet member, should stay away from oil.
“Bobby, stay away from the oil, stay away from the liquid gold!” Trump quipped. “We have more than Saudi Arabia and Russia.”
So, while we are still months away from Trump taking office and enacting his policies, here’s what he’s vowed to do so far.
On the campaign trail, Trump vowed to place sanctions on Iranian and Venezuelan barrels, which could result in the global market becoming tighter and prices rising. He has also expressed his intent to increase US oil production on public lands and to reopen offshore oil and gas leasing.
It is important to note that oil production has already hit record highs under the Biden administration, according to the US Energy Information Administration.
With Trump also running on the promise of placing tariffs on foreign nations, the possibility of a trade war could also create a pause in economic growth, slowing oil demand.
Because of these factors, experts aren’t sure what will happen with oil prices.
“Conceptually, the impact of a potential second Trump term on oil prices is ambiguous, with some short-term downside risk to Iran oil supply ... and thus upside price risk,” Goldman Sachs commodities analysts wrote in a research note Monday, CNBC reported. “But medium-term downside risk to oil demand and thus oil prices from downside risk to global GDP from a potential escalation in trade tensions.”
The United States remains the world’s largest oil producer, accounting for 22% of the total global production, according to the Energy Information Administration.
When it comes to the other key energy sectors, Trump has vowed to end federal support for electric vehicles and the push to EV; he’s said he will resume Liquified Natural Gas exports; and he’s criticized the offshore wind industry.